Pit & Quarry, February 2018

TAXES The tax rate for incorporated aggregate businesses will be reduced from 35 percent to 21 percent for the 2018 tax year AUTO EXPENSE When it comes to cars and light trucks used in an aggregate operation new limits on the write off for the cost of so called luxury automobiles and personal use property were included in the TCJA For passenger automobiles and light trucks placed in service after Dec 31 2017 where the additional first year depreciation deduction is not claimed the maximum amount of allowable depreciation is increased to 10000 for the year in which the vehicle is placed in service 16000 for the second year 9600 for the third year and 5760 for the fourth and later years in the recovery period For passenger automobiles placed in service after 2018 these dollar limits are indexed for inflation And for those eligible for bonus first year depreciation the maximum first year depreciation allowance remains at 8000 SMALL BUSINESS ACCOUNTING METHOD AND SIMPLIFICATION Simplifying the rules governing the method of accounting that must be used for tax purposes is a welcome option Businesses with average annual gross income of less than 25 million may now use the simple cash basis accounting method Under this provision the current 5 million threshold for corporations and those partnerships with a corporate partner is increased to 25 million and the requirement that such businesses satisfy the 25 million limits for all prior years has been repealed Also under the new law the average gross receipts test will now be indexed to inflation With the cash method of accounting an aggregate producer may account for inventory as non incidental materials and supplies Or as an alternative a business with inventories using the cash method of accounting and qualifies would be able to account for its inventories using the method of accounting reflected on its financial statements or its books and records NOLS LOSE One of the benefits of net operating losses NOLs was the fact that they could be carried back to more prosperous years to create a refund of taxes paid in those earlier years providing an immediate infusion of badly needed cash Today the NOL deduction has been severely limited The write off is now limited to 80 percent of taxable income and only in special cases will an NOL carryback be permitted There is no limit on how far forward NOLs may be carried AND MUCH MORE Obviously the massive TCJA contains many more changes including immediate relief from the so called death tax by doubling the estate tax exemption amount S corporations attempting to convert to regular C corporations will face new rules Section 199 the deduction for so called domestic production activities has been repealed and partnerships will no longer terminate upon the death or exit of a partner According to our lawmakers the TCJA modernizes our international tax systems making it easier and far less costly for U S businesses to bring home foreign earnings The international provisions of the JCTA also prevent U S jobs headquarters and research from moving overseas by eliminating incentives All in all however the Tax Cuts Jobs Act appears to favor businesses over individuals with longer lived tax savings P Q Mark E Battersby is a freelance writer who has specialized in taxes and finance for the past 25 years MEV The Sizing People 0LGZHVWHUQ QGXVWULHV QF ä Specializing in Frac Sand particle separation Vibratory rectangular screening equipment Custom wire woven in house and made to order for most makes and models Experience you can trust Servicing the screening industry for over 65 years Quality products manufactured in the U S A TOLL FREE 877 4 SIZING 877 474 9464 Replacement Screen Panels Visit Midwestern Ind at Booth 1306 March 6 8 Houston Texas www midwesternind com sales@ midwesternind com 70 PIT QUARRY February 2018 pitandquarry com